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Redfin is cutting ties with the National Association of Realtors, CEO Glenn Kelman and seven of his fellow executives announced Monday morning in a surprise blog post unveiling its plans.
In a message to employees signed by eight executives, Kelman cited the 1.56-million member real estate trade organization’s recent sexual harassment scandal alongside a host of other grievances, including NAR’s commission structure, as the primary reason for its call for as many as 1,800 brokers and agents to cancel their membership immediately.
The brokerage had already made the decision to resign from NAR’s national board in June, before the sexual harassment scandal came to light. Kelman added that NAR gave the brokerage an “all or nothing” choice and they chose “nothing.”
“We’d already been uncomfortable with the NAR’s positions on commissions when we read reports of sexist behavior and sexual harassment, by the NAR’s president and others,” Kelman wrote in the letter, which was co-signed by Chief Technology Officer Bridget Frey and Senior Vice President of Real Estate Operations Jason Aleem, among others. “Now, after careful deliberation, Redfin will go further than resigning from the NAR board, requiring our brokers and agents to leave NAR everywhere we can.”
Redfin officially joined NAR in 2017, and has paid more than $13 million in dues since then, according to its announcement.
Redfin’s announcement is the latest setback for NAR since earlier this summer, when revelations emerged that executives at the highest rungs of the trade organization were aware of alleged misconduct within its leadership, including sexual harassment complaints against then-President Kenny Parcell, who resigned in August following a New York Times investigation.
NAR staffers have since called for the resignation of top brass including CEO Bob Goldberg, Vice President of Talent Development Donna Gland and Chief Legal Officer Katie Johnson.
In addition to the misconduct allegations, NAR is defending itself elsewhere, including ongoing lawsuits that claim its policies violate antitrust laws and inflate the fees homesellers must pay to buyers agents.
The trade organization — the largest organization of its kind in the United States — controls access to listings databases, lockboxes and industry-standard contracts in some markets, meaning some Redfin agents will be forced to retain their membership in order to continue conducting business.
In its statement, Redfin said it would intensify lobbying efforts to change some of NAR’s policies.
“We’re asking NAR to decouple local access to these tools, including the listing databases known as Multiple Listing Services, from support for the national lobbying organization,” the statement reads. “Agents shouldn’t have to underwrite policies and legal efforts that hurt consumers when most of us got into real estate to help consumers.”
It will also be allowing its agents who work in markets where NAR membership is required to access the local MLS to retain their membership.
NAR owns the trademark to the word “Realtor,” meaning those who leave the organization will no longer be able to refer to themselves as such.
In a statement, NAR spokesperson Mantill Williams said the organization respected Redfin’s decision to separate, and defended the local MLS broker marketplace model.
“Redfin told us in June they were planning to separate from NAR, and we respect their choice to do so,” the statement reads. “The U.S. model of local MLS broker marketplaces has long been — and still is — considered the best value in the world. NAR stands by its pro-consumer, pro-competitive guidance for affiliated local broker marketplaces that ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers.”
Redfin said it would continue to support the MLSs brokers use to share listing data and would continue to support the individuals who work at NAR.
“We love our industry,” they said. “We’ve tried to love NAR. But enough is enough.”
Read Redfin’s full message below:
Redfin is moving to end our support of the National Association of Realtors for two reasons:
- NAR policies requiring a fee for the buyer’s agent on every listing
- A pattern of alleged sexual harassment.
A Long Time Coming
We’ve had many meetings with NAR execs to explore compromises on the policies that would let us continue our support. Since a Redfin-wide initiative to join NAR in 2017, we’ve paid more than $13 million in dues, in an effort to influence NAR to advocate for an open, technology-driven marketplace that would benefit consumers. We’ll now explore other ways to advance those goals.
A Pattern of Alleged Sexual Harassment
We’d already been uncomfortable with the NAR’s positions on commissions when we read reports of sexist behavior and sexual harassment, by the NAR’s president and others, based on interviews with 29 former NAR employees. NAR was aware of the allegations for months and in some cases years, but reacted only when those allegations became public, and only after the CEO said there wasn’t a problem. Many employees described a culture of intimidation and retribution; many are still calling for more accountability.
Resigning from the NAR Board
Redfin had already resigned our national board seat in June, before the alleged sexual harassment came to light. In the many marketplaces governed by its policies, NAR still blocks sellers from listing homes that don’t pay a commission to the buyer’s agent, and it blocks websites like Redfin.com from showing for-sale-by-owner listings alongside agent-listed homes. Removing these blocks would be easy, and it would make our industry more consumer-friendly and competitive.
Redfin Will Require Many of Our Agents To Resign From NAR
Now, after careful deliberation, Redfin will go further than resigning from the NAR board, requiring our brokers and agents to leave NAR everywhere we can. Most brokerages are only a loose affiliation of independent agents, and none of us wants to impose a policy that could alienate any of the people who generate our revenue.
NAR Has Forced An All-or-Nothing Choice On Us
But this all-or-nothing approach isn’t of Redfin’s choosing. NAR rules require us to leave local and state associations even when our only beef is with the national association. The rules require that for a broker to be a member, she must pay dues for each of the agents under her supervision, regardless of whether an agent wants to be a member. The rules further say that if a broker isn’t a member, no agent under her supervision can be a member.
So We Choose Nothing
This is like eating at a restaurant that requires you to buy food for your entire family even when you come in alone, and that also says no family member can dine there if you ever stop dining there too. The painful choice is to stop patronizing that restaurant altogether.
In Many Markets, We Can’t Even Do That
But often we don’t even have that choice. In about half the U.S., including in cities like Charlotte, Dallas, Houston, Las Vegas, Long Island, Minneapolis, Nashville, Phoenix and Salt Lake City, we can’t quit NAR individually or en masse, because NAR membership is required for agents to access listing databases, lockboxes, and industry-standard contracts. It’s impossible to be an agent if you can’t see which homes are for sale, or unlock the door to those homes, or even write an offer.
We Want NAR to Decouple MLS Access from NAR Support
We’re asking NAR to decouple local access to these tools, including the listing databases known as Multiple Listing Services, from support for the national lobbying organization. Agents shouldn’t have to underwrite policies and legal efforts that hurt consumers when most of us got into real estate to help consumers. Redfin’s mission after all is to redefine real estate in consumers’ favor.
We’re Committed to Our Industry’s Future. NAR Isn’t the Future.
Our disagreement is with NAR, not with our industry. Brokerages can compete on price and still cooperate to show all the homes for sale. Redfin will continue our full support of the MLSs that brokers use to share listing data, and we’ll remain friends with the many fine people working at NAR and its local affiliates on economics, diversity, and pro-housing policies. We love our industry. We’ve tried to love NAR. But enough is enough.
Anna Stevens | Anthony Kappus | Bridget Frey | Chris Nielsen | Christian Taubman | Glenn Kelman | Jason Aleem | Keith Broxterman
